YSS Corp. Announces Preliminary Q2 2020 Results and Operational Update
Jul 23, 2020, 07:00 ET
CALGARY, AB, July 23, 2020 /CNW/ - YSS Corp.™ (the "Company" or "YSS") (TSXV: YSS) (WKN: A2PMAX), a premier Canadian cannabis retailer with operations under the YSSTM and Sweet TreeTM brands and a trusted destination to explore and discover cannabis in Canada, is pleased to announce preliminary Q2 2020 financial results and provide an operational update.
Q2 2020 Highlights
Revenue of $4.7 million increased 12% over Q1 2020 and exceeded the Company's Q2 2020 outlook of $4.6 million.
Gross margin of $1.4 million was 6% higher than Q1 2020 and exceeded the Company's Q2 2020 outlook of $1.3 million.
Store-Level EBITDA1 of $358,000 represents a 131% increase over the previous quarter.
General and administrative costs of $671,000 were $149,000 (18%) lower than in Q1 2020.
By the end of Q2 2020, YSS had successfully increased the number of EBITDA1 positive stores to 15 compared to 13 at the end of the previous quarter.
Positive growth trends have prevailed through the first half of 2020 and have continued into July. Based on data reported by Statistics Canada for the first five months of 2020, Canada and Alberta are on-pace to exceed $2.0 billion and $450 million in retail cannabis sales in 2020, respectively, which would represent an increase from $1.2 billion and $255 million, respectively, in 2019 annual retail sales.
Concurrent with this growth, YSS has taken steps to improve operational efficiencies. These steps, combined with increased same-store sales, have resulted in store-level EBITDA1 margin improvement from 4% in Q1 2020 to 8% in Q2 2020 with the expectation to exceed 10% in Q3 2020.
YSS remains on target to exit 2020 with positive run-rate corporate EBITDA1. This goal would be accelerated if the Company maintains a consistent pace of same-store growth for the remainder of 2020 and realizes positive contribution from opening and operating additional stores in 2020. Construction on the next two YSS stores, located in Waterloo and Edmonton, is expected to commence in the coming weeks.
With $4.6 million of cash and no debt at the end of Q1 2020, YSS has ample capital to support ongoing same-store growth and complete the construction of planned new stores in Alberta and Ontario while maintaining the financial flexibility to pursue strategic acquisition opportunities.
1 Non-IFRS measure. Store-Level EBITDA is defined as revenue less cost of goods sold and operating costs before corporate general & administrative expenses, and Corporate EBITDA is defined as Store-Level EBITDA less corporate general & administrative costs.
Concurrent with this press release, the Company has posted an updated corporate presentation on the investor portal of the YSS website at: https://ysscorp.ca/investors
During the COVID-19 pandemic, YSS and Sweet Tree stores have remained open, with operations continuing without meaningful disruption. In the face of COVID-19, YSS' business value of trust has been prioritized more than ever. The Company cares deeply about the safety and well-being of its employees, customers, and partners, and is pleased with the positive outcome of measures put in place to ensure stores are clean and safe, and with the success to date of its click and collect program, which minimizes the in-store time required for customers.
Selected financial and operational information is outlined in this press release and should be read in conjunction with YSS' the audited consolidated financial statements for the quarter ended March 31, 2020 and the related management's discussion and analysis ("MD&A"), each of which is filed on SEDAR at www.sedar.com and posted to the Company's website at www.ysscorp.ca/.
For information on store locations, updates on promotions, store openings and to access the Company's click and collect service please visit www.ysscorp.ca, www.sweettreecannabis.com and follow us on social media.
For additional information regarding YSS Corp. please see the Company's website at www.ysscorp.ca/investors and filings available under the Company's profile on SEDAR at www.sedar.com.